Donohoe attacks Opposition TDs over criticism of property tax

Minister says PBP ‘for nothing, against everything’ and insists tax is based on fairness

Paschal Donohoe has forcefully defended the local property tax. File photograph: The Irish Times

Paschal Donohoe has forcefully defended the local property tax. File photograph: The Irish Times

 

Paschal Donohoe forcefully defended the local property tax and reforms to be unveiled today against Opposition criticism that the tax is “fundamentally unjust” and regressive.

The Minister for Finance rounded angrily in the Dáil on People Before Profit TDs Paul Murphy and Richard Boyd Barrett who called for the tax to be scrapped and replaced with a wealth tax, including a “Covid wealth tax” on those who benefited from the pandemic.

Mr Donohoe insisted the tax was based on fairness and that most home owners would not face an increase in tax.

He claimed the two TDs “are in favour of tackling the climate crisis, but they’re against any changes in carbon pricing. They want higher spending, higher investment in housing, but they’re against any changes in the local property tax.

“The kind of politics we’re seeing here that I expect to see more of in the coming weeks, months and years”, he said, “Is for nothing it’s against everything.”

The Minister, speaking ahead of the unveiling today of the legislation to reform the tax, said “the measure this Government is bringing forward is looking to broaden the local property tax bases so that all homes are taxed fairly.

“We’re making changes in relation to the way in which the bands are structured to do all we can to ensure that the bill that is going to be presented to homeowners across January and February next year is fair and it is as affordable as possible.”

Mr Boyd Barrett said the Minister should put a tax on multiple property owners, not on the family home “and you could raise just as much money, and it would be a far fairer and less regressive tax”.

He said the property tax was a fundamentally unjust tax because “it takes no account whatsoever of the income or ability to pay of the homeowner.

“And it becomes even more unfair in the context of the disastrous failure of this Government to control the fundamentally dysfunctional housing market.”

Mr Murphy, calling for a tax on the very wealthy, said “all of their assets should be taxed including properties stocks, shares, their yachts, the sports cars and everything else instead of hitting ordinary people again – it’s time that we taxed the rich.

He also claimed there were many similarities in the launch of the recovery plan and with the property tax reforms to what happened in the 2008 economic crash “when the Government responded by bailing out the banks and making ordinary workers foot the bill through cuts to public services and taxes just like this. The result was untold suffering for many, and massive profiteering for a few.

“Now there was the funnelling of huge amounts of money to big business with no string attached at the same time as hiking up property tax for workers, cutting back on PUP supports for those who’ve lost their jobs and letting landlords impose double rent hikes to drive up their profits.”

But rounding on Mr Murphy, the Minister said he “read out a script that was written a decade ago”.

“I’m absolutely aware of the challenges that homeowners, of our citizens and all they face at the moment. But that is why we brought in all the measures we announced yesterday to help guide our country through this crisis.

“I’m absolutely certain if I was to bring in some of the measures the deputies are looking for they’d find some reason for opposing them.”

It is estimated that one-third of homeowners face an increase in their property tax bills of about €90 as part of a new reform of the system due to be unveiled by the Government on Wednesday.

The Cabinet has agreed to cut the rate at which the tax is charged and to broaden the bands in a move that will see the bills of more than 50 per cent of households remain the same.

The proposals also include previously exempt new properties built in 2013 when the tax was introduced.

The Minister insisted the measures proposed will cut the rate of the tax and widen the band and that the majority of homeowners would see either a decrease or no change, notwithstanding the significant increases in property values since 2013.